>Visionary ideas derive directly from centering people at the margins
But I think the conundrum is still one step further - in these instances of the rich college kids building for their marginalized selves, they had the means by which to do it. The big for-profit corporations have the means too, but their existence is credited to being for-profit, because the corporations exhibiting not-as-profitable behavior eventually shrink or disappear.
So I would say innovation still comes back to who can shoulder the risk. Wealthy college students can take the risks because they can always fall back on their trust funds or nepotic jobs, but decision makers at corporations can't because their not-profitable decisions affects their continued existence at a profitable corp.
That means "Data Driven Innovation" comes down not to be literally "Data Driven", but really about spinning a story with whatever data to convince corporate gatekeepers that this new feature for the marginalized isn't that risky an innovation. Unfortunately people do take it literally, which is why this piece is a great reminder about where real innovation comes from.
> Three reasons companies lose their best innovators.
> 1. They fail to recognize and support the innovators
> 2. Innovation becomes a herculean task
> 3. Corporations don’t match rewards with outcomes
While the paragraphs under point 2 do discuss risk and the paragraphs under point 3 do discuss rewards, I'm not sure this article belongs here.
Risk and Reward.
Large corporations are able to pay people by doing things at scale; with sufficient margin at sufficient volume to justify continued investment. Risk is minimized by focusing on ROI.
Startups assume lots of risk and lots of debt and most don't make it. Liquidation preference applies as the startup team adjourns (and maybe open-sources what remains). In a large corporation, that burnt capital is reported to the board (which represents the shareholders) who aren't "gambling" per se. "You win some and you lose some" is across the street; and they don't have foosball and snacks.
How can large organizations (nonprofit, for-profit, governmental) foster intrapreneurial mindsets without just continuing to say "innovation" more times and expecting things to happen? Drink. "Innovators welcome!". Drink water.
"Intrapreneurial." What does that even mean? The employee, within their specialized department, spends resources (time, money, equipment) on something that their superior managers have not allocated funding for because they want: (a) recognition; (b) job security; (c) to save resources such as time and money; (d) to work on something else instead of this wasteful process; (e) more money.
Very few organizations have anything like "20% time". Why was 20% time thrown off the island to a new island where they had room to run? Do they have foosball? Or is the work so fun that they don't even need foosball? Or is it worth long days and nights because the potential return is enough money to retire tomorrow and then work on what?
... Is acquiring innovation and bringing it to scale a top-down process? How do we capture creative solutions and then allocate willing and available resources to making that happen?
>Contrary to popular belief, entrepreneurs typically make terrible innovators. Left to its own devices, the private sector is far more likely to impede technological progress than to advance it. That’s because real innovation is very expensive to produce: it involves pouring extravagant sums of money into research projects that may fail, or at the very least may never yield a commercially viable product. In other words, it requires a lot of risk – something that, mythmaking aside, capitalist firms have little appetite for.
My key takeaway from the article.
When you research things, it's not like Sid Meier’s Civilization, you don't get a tech tree.
You might spend years looking and find nothing or you might make the internet.
Corporations won't invest that way, it would kill them.
* innovation happens when you target parts of long tail (margins)
these points are expressed from social group problems perspective. My personal takeaway is that targeting marginalized groups can produce significant innovation.
>> Why is it that innovations require heroics to occur in our organization?
Why do we immediately assume that innovation = progress? Sure, the things that SURVIVE are useful, but that's just the tip of the iceberg. The vast majority of ideas are just like mutations in evolution more likely to be at best useless and probably damaging in various ways.
You see, social constructs are not as dumb as they appear to be to the armchair intellectual. "Why, we should embrace innovation and immediately adopt any idiocy that Mary from accounting is suggesting as our global company policy". I assure you that by natural law, if "random idea from random guy" were profitable on average, we'd have a system that would encourage such ideas. The sad fact is that they aren't and will never be.
Friction (named in the article as "Dysfunctional Organization") is an unfortunate but necessary process which ensures "survival of the fittest", even among "innovation". It's as simple as that.
I think the author is pointing to a problem but not correctly identifying what the problem is. The problem is deeper.
If the problem were that we have socialized risk of innovation but privatized the rewards, that wouldn't really be a problem. It's a good thing to incentivize innovation.
The real problem is that we don't incentivize innovation.
Instead, we incentivize investment. People who already have money to invest take on small calculated percentages of risk to make back large amounts of money. Frequently the money investors are investing isn't even their own, and they are paid a significant salary to do so, meaning they actually take on none of the risk.
The negative results of this are twofold:
1. Often investors don't invest in innovation. It's equally profitable to invest in number-twiddling schemes that provide no benefit to anyone except the investor, and often that's easier.
2. We speak of companies as if they are single entities. But the reality is that executives and shareholders and of a company are the beneficiaries of any innovation within a company, while innovation typically comes from workers with technical expertise who are typically paid a relatively limited salary perhaps with some minimal stock options.
The way around this problem is typically to get into a company early enough that the line between technical worker and executive is blurred. But that avoids only the problems with lack of reward--it actually exacerbates the risk problem because early commitment to a company is a high-risk endeavor.
In the end, I think that a lot of innovators don't innovate for money anyway--I personally would rather see something I make change the world than make a lot of money off an idea that doesn't make any difference (or makes things worse!). As long as I have enough to live I'm okay. But it would be nice if we stopped pretending that our distribution of wealth is at all meritocratic.
> Coming up with something truly new is much, much harder than people give it credit for
100% agree, and yet harder still is to keep working on something truly new, trying to drive it forwards, when at best nobody cares and at worst people actively resist the implicit challenge to the status quo. Even, perhaps especially, smart and conscientious people who are already authorities in the field.
I think when people think about innovation being hard, there is a lot of focus on creating good new ideas. They're right, that's really hard, but innovation is about much more than that - it's really about sticking with the good new idea for a long period of time when there are no obvious (to most people) incentives to do so, economic or otherwise.
The full quote: "Innovation is a vehicle for the creation of wealth. Innovation is in and of itself fairly worthless. The only reason the concept of innovation is so popular is because of the value (and the valuations) we put on companies who are seen to be innovating"
I don't see how that can be interpreted that way in context.
It certainly makes you wonder, what other innovations could we have made decades ago, but nobody was willing to take the risk? Currently most of our innovation is directed towards computer systems for keeping track of people and data, which in many cases can be broadly characterized as systems of control. And that appears to be what our society prioritizes, whereas a company like SpaceX only comes along once in a blue moon. And Elon himself is sort of a fluke as he's a person who is both a child of wealth, and also has a curious mind and a knack for understanding engineering problems. There are lots of curious people with a knack for understanding engineering problems but most of them weren't born into money and of the ones that were, only Elon has emerged as willing to make SpaceX level risky investments. It makes sense; if you're that rich, you have no desire to genuinely innovate, since you're already set for life and by definition are one of the people who benefited from society being exactly as it is.
Maybe that's the real takeaway here: the people at the top of society by definition benefited from things being as they are, therefore those people are the least likely to want innovations that might cause real change. Therefore to the extend that society is unequal, it is also unable to innovate. I wonder if you could put that hypothesis to the test with data.
Capital really doesn't drive innovation at all except in very specific situations where there are sufficient regulations and guardrails to coax companies in the direction of progress (and you certainly won't see innovation happening under completely unregulated capitalism). It's almost always independent and/or individual people -- researchers, open source contributors, scientists, etc -- who come up with society-changing technologies and ideas. In the mid 1900s, the large tech corporations ran enormous corporate laboratories, like the famous Bell Labs that would churn out things like this (Unix, almost the internet, etc). Rampant de-regulation of capital in the 70s and 80s led to an industry shift that removed these guardrails and incentives and made it easier to simply monopolize, price fix, and acquire your way to the top, as the oil and rail tycoons had in the early 1900s, and that is where we find ourselves now. FANG companies are not innovators -- they have become machines that swallow up the innovations of others and either neutralize or begrudgingly copy them in such a way that still manages to crush competition via economies of scale.
Google, the "great innovator" of search hasn't innovated on the topic of search engines in over a decade, and instead relies on multi-billion dollar deals to ensure Google is the default search engine on every mobile device in the world. When a competitor emerges, they acquire and shutter it, or sit pretty knowing economies of scale will ensure new competitors won't get sufficient traction.
For the last decade, Apple has simply watched the tech industry very closely, cultivated their image as a glorified fashion company (everything driven by design and status-symbol imagery), exerted monopolistic control over an entire industry via their app store fees and tight restrictions, and used their unlimited resources to copy or buy their way into the features and ideas actual innovators have proven will play well in the coming years.
All of these companies are threatened by, and afraid of innovation, and they will stop it from happening if they can. They compete and innovate, only if they have to, and would much rather just pay you to not innovate. Capital isn't going to create innovation -- regulation of capital, done correctly, will.
>You might say that innovation requires investment but there have been many examples of poor people, without outside investment, innovating to make people's lives better.
Frankly, I've become very wary of "real" innovation, the kind of "disruptive" innovation that the VCs chase after. All too often, that kind of innovation involves my data being winkled out of me and sold to the highest bidder. It involves some schlub working for minimum wage with no benefits and no job security. It involves a diverse and competitive industry being obliterated by one or two dot-com behemoths. It involves one thing becoming more efficient, at the expense of thousands of lives becoming less autonomous.
Innovation has always had externalities and unexpected downsides, but never in my lifetime has it felt so overtly predatory. It seems like the robber barons of the 19th century have returned, only this time they wear branded hoodies and give TED talks. One of those robber barons literally argues that monopolies are good for society.
> I get the innovator mentality of sweeping away the old but there seems to be a fine line between innovation and ignorance.
I think that this is the "innovator mentality" insofar that, as a group, we tend to idolize/cargo cult innovation as if it was always a good thing. As the pile of things that I miss grows much faster than the things that I feel that I've gained I have come to think of "innovation" as a force for destruction, rent-seeking, and greed, just as much as it can be a force for improvement.
As you say, in many cases things are the way they are because reasons. And some snot-nosed wanterpreneur is just as likely to degrade the situation as they are to improve it.
> Restricting innovation to only things approved by people with the right values and goals has quite a track record of backfiring spectacularly.
Counterpoint: not restricting innovation in any way has quite a track record of backfiring spectacularly, too, because it turns out the goal is often "make as much money as possible at the expense of everyone else".
Love this: "by seeking to address the needs of people- especially those at the margins- in ways that respect, restore and augment their capabilities, we can invent forms of technological innovation that would have otherwise been invisible."
> old ideas are bad until they’re suddenly very good
Sure, for an idea to become suddenly very good you either have to rely on technology advancements / innovation, as in the case for cannons that before Napoleon were unreliable and dangerous, or you have to make a controlled bet to test your hypothesis, as in the case of Venture Capital that invests in hundreds of startups (selected according to their investment model) estimating that a small percentage of them will turn out successful.
So my key point is, if an idea becomes very good (i.e. through innovation) it'll be harder to invalidate it, and if you invest in an idea that you aren't comfortable with yet (i.e. venture capital) there'll be a higher risk attached to it.
> If I was to propose my own cod theory of why big companies don't innovate, it would probably involve them seeing innovation as driven by MBAs formulating "innovation strategies" based on articles full of interesting anecdotes and open-to-interpretation theories rather than management saying yes to a higher proportion of projects their underlings want budget for.
Well said. Even at innovative companies like Apple or Amazon, it's amazing how many interesting and exceptional ideas get budgeted out of existence due to prioritization of top down initiatives from senior level executives that are several levels removed from customers and the people capable of solving the customers' problems.
>Visionary ideas derive directly from centering people at the margins
But I think the conundrum is still one step further - in these instances of the rich college kids building for their marginalized selves, they had the means by which to do it. The big for-profit corporations have the means too, but their existence is credited to being for-profit, because the corporations exhibiting not-as-profitable behavior eventually shrink or disappear.
So I would say innovation still comes back to who can shoulder the risk. Wealthy college students can take the risks because they can always fall back on their trust funds or nepotic jobs, but decision makers at corporations can't because their not-profitable decisions affects their continued existence at a profitable corp.
That means "Data Driven Innovation" comes down not to be literally "Data Driven", but really about spinning a story with whatever data to convince corporate gatekeepers that this new feature for the marginalized isn't that risky an innovation. Unfortunately people do take it literally, which is why this piece is a great reminder about where real innovation comes from.
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